Oil jumps as Russia and Saudi Arabia reach consensus on production curb

23:30, October 10th 2016
· By Margaret Yang Yan

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Energy stocks rally as oil prices jumped to one-year high

Crude oil prices rose to its one-year high after Russian President Putin and Saudi Arabia’s energy minster reached consensus on production freeze to support the oil price in an energy conference held in Istanbul. OPEC members have just reached an agreement on curbing output in their earlier Algiers meeting a few weeks ago. Putin’s comment showed clear sign that another big oil producer would join the camp in freezing output, since a higher oil price obviously aligns with the national interests of those countries.

The surge in oil prices led to rally in energy stocks worldwide. US equities closed half a per cent higher, with the energy sector outperforming (+1.5%). Euro Stoxx 50 index climbed 1%, and this is also led by energy stocks running up 2%. The positive sentiment may spread over to Asian markets today. Singapore’s oil & gas sector and energy stocks may be lifted by the positive development in the outlook of oil prices.

WTI crude oil Nov contract has broken the key resistance level of $50.50 and the next resistance levels will be at $52.73 (100% Fibonacci Extension level) and 53.44 (100% Fibonacci Retracement level) respectively.

Crude Oil West Texas Nov 2016

The second US presidential debate revealed little insights

The second US presidential debate wound up as a show of personal attacks between the two candidates and thus revealed little insights on their policies stance. More could be contributed towards issues on foreign policy, trade and economics. Nonetheless, two earlier polls showed that Clinton has apparently won the second debate. According to Financial Times, the national polling average also indicates that Clinton is leading Trump by around 5.1%, with widening margins after the second debate.

Market would probably enjoy a few more days of “risk-on” sentiment as Trump’s victory – a scenario that most investors do not wish to see - now becomes less likely. However, we shall all keep an eye on the third debate and the progress of the election campaign. The final election is 27 days away and a lot of unforeseeable surprises could happen.

Source: Financial Times

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